The Economic Crunch: Financial troubles have students rethinking college goals

Even with a 30 on the ACT, Ashley Hicks’ dream of attending Vanderbilt may be a stretch. The economy has many mulling their choices.

Even with a 30 on the ACT, Ashley Hicks' dream of attending Vanderbilt may be a stretch. The economy has many mulling their choices.Nikki BoertmanThe Commercial Appeal

A year ago, they weren't worried. Six months ago, they weren't overly concerned.

Now, Wall Street's nightmare has shown up -- sickle in one hand, balance sheet in the other hand -- to interrupt their grand college dreams.

"We always said if Neal wanted to go to Harvard, we'd make it happen," Julie Ganey said of her son, a Houston High School senior with a 4.0 GPA and a 33 on the ACT. "But the only big investment we have-- a mutual fund-- is probably at 50 percent of its worth from last summer."

Two-income American families preparing to send their children to college have been hit hard on three fronts, says Rod Bugarin, a financial aid adviser for applywise.com in New York, and a former financial aid counselor at Brown and Columbia universities.

"Their home equity, their college savings, their retirement, have dwindled rather quickly," Bugarin said. "Now, their child's college (choice) is being affected by that."

Financial aid and scholarships are out there, and the Tennessee Hope Lottery Scholarships for residents who attend college in-state can bring $4,000 to $5,000 a year at a four-year college for those with the required grades and test scores.

But it's tough out there.

"Most people with a 21 (on the ACT) are not getting into UT-Knoxville," said Andrea Little, college and career counselor at Houston. "Their average ACT is about a 26. And the average GPA is 3.6. Gone are the days of, 'I'm just gonna go to Knoxville.'"

So, Little recalls an old saying that is perhaps truer than ever: When applying to college, it's best to be "really, really smart and really, really poor."

Weighing the options

Ashley Hicks' dream school is Vanderbilt University. But even with a 3.9 GPA and a 30 on the ACT, that dream might be a stretch. Or perhaps not as much of a stretch as is it would first appear.

"Individuals look at the $50,000 sticker price and say, 'There's no way I can afford this,'" said Douglas Christiansen, associate provost for enrollment and dean of admissions at Vanderbilt.

For the 2008-09 academic year, tuition was $36,100; room, board, tuition and books was $52,303.

However, this fall, the school expanded its financial aid program and replaced need-based loans with grants. The 104 incoming freshmen this year whose family incomes ranged from $80,000 to $99,000 received anywhere from $19,000 to $50,000 in assistance from Vanderbilt. Of course, the formula for making those awards also takes into consideration other financial holdings, such as stocks and real estate.

"Tulane's offered me a lot of money," said Hicks, a Germantown High senior who works part-time at an ice cream shop.

But she doesn't feel the same excitement for Tulane.

"So she's come full circle," said her mother, Sharon Hicks. "The Honors College at U of M (in combination with the Hope Scholarship) could actually put money in her pocket."

Ask Ashley about Vanderbilt and she perks up: "I could see myself there. It's got all the southern culture, but it's still a prestigious school."

She eventually winds around to the same conclusion about Memphis -- "I could see myself there" -- but not before a little point-counterpoint.

"People call it 'Tiger High,'" she said. "But I've got a couple of friends who made good grades and they say it's not that bad, they enjoy it, they enjoy campus life."

Paula Mistretta, college and career counselor at Ridgeway, can envision a lot of students being successful and happy at Memphis.

"I'm a strong believer that the University of Memphis is a great school," Mistretta said.

"Ohio State is starting to cut back their programs," he said. "A lot of universities have had their endowments drop, as well as their alumni giving."

Get smart

As dean of student financial assistance at Christian Brothers University, Jim Shannon's day job is to help the school and its prospective and current students.

But each year, on his own time, he gives upwards of 30 presentations at area high schools to help other parents and students.

"We stigmatize our young people to where they think everybody has to go to college," Shannon said.

Everybody doesn't, of course, but Germantown High college and career counselor Ruth Fischer says, "Everybody wants to. Even those that are barely passing high school."

The 2008 Shelby County Schools' senior exit exam seems to confirm that belief. Nearly 73 percent of last year's 3,261 seniors said they were headed to a four-year college and another 7.5 percent to a two-year college.

The National Student Clearinghouse reported 45 percent of Memphis City Schools' 2007 seniors enrolled in a 2- or 4-year college the fall after graduation. And in the Climate Survey of 2008, 90 percent of participating seniors said they planned to go to college sometime.

Shannon says that the lower-middle income group is the hardest to finance to school. But he also says about three times as much scholarship and grant money comes from private sources as from the government.

"Probably the biggest things people leave on the table are the early-deadline scholarships," he said.

Ultimately, Shannon emphasizes the practical.

Bugarin says he understands families wanting to save money on college up front, but says students need to be more qualified than ever before to compete for jobs.

College to-do list

1. Take and retake the ACT or SAT.

2. Gather information about outside scholarships from your high school counselor (starting in the fall).

5. Be sure to log on as soon as possible after Jan. 1, 2009, and fill out the worksheet. Get a pin number for yourself and a parent. Tennessee students must do this annually for the Hope Lottery Scholarships and other state grants.

6. Complete other forms required by colleges (such as the Profile at collegeboard.com).

9. Respond to your award notification letter within the required time frame.

10. Send any required documents as soon as possible to the college you plan to attend.

Important FAFSA information

Tennessee residents going to a Tennessee college or technical school need to fill out the free application for federal student aid (FAFSA) no later than Feb. 25. Estimated data can be used if necessary to meet this deadline.

The FAFSA may be sent to as many as 10 schools. Tennessee residents need to list a Tennessee school on the FAFSA even if they plan to go out of state, in case they change their mind or transfer back into Tennessee. List a high-cost Tennessee school first, if applying to more than one Tennessee school. The FAFSA must be renewed each year.

Tennessee Hope Lottery Scholarship qualifications:

For recent high school graduates with a 21 ACT (980 SAT, critical reading and math only) or a 3.0 GPA (weighted), $4,000 annually at four-year schools; $2,000 annually at two-year schools.

If your adjusted gross income is less than $36,000, you also could be eligible for additional funding.

Students with a 29 ACT AND a 3.75 GPA can receive an additional $1,000 annually to the base of $4,000.

This is another in an occasional series looking at the effects of the economy on everyday people. Know someone, or a business, hurting or benefiting from the current economic climate? We'd like to hear about it. Contact reporter Don Wade at dwade@commercialappeal.com or by calling 529-2358.